Learning & Insights

Are employee credit cards right for my small business?

If your employees do a lot of company spending with their own money, you may consider providing them with a business credit card. Employees will appreciate the convenience, and you'll enjoy the benefits.

The benefits

Typically, these cards are linked to a main business credit card account, with individual spending limits for each employee.

Cards can also be linked to a rewards program, giving your business the opportunity to earn points for future spending needs. And they may include extras such as liability insurance, spending reports and even compatibility with accounting software programs, like Quicken® or QuickBooks®.

But, before you give your employees business credit cards, here's some advice to consider.

Clearly communicate expectations

Be clear about the policies and procedures for using a business credit card—spending limits, restrictions, when receipts are due, pre-approved expense requirements, etc. Be as specific as possible and explain what an employee can and can't do. For example, is there a cap for meals when entertaining clients? Can employees charge gas and tolls on the card?

It's important you let your employees know that you'll check their transaction history regularly—not just to keep track of spending, but also to get a better picture of what the business needs to purchase on a regular basis.

Be selective

Start small by giving credit cards to just a few key employees. It's much easier than trying to give a credit card to every employee. And, if you find that some employees make infrequent purchases, reimbursement may make more sense.

Implement protective procedures

Clearly instruct employees that personal expenses are never to be charged on their business card, and make sure employees understand their limits should never be surpassed.

Set up clear processes for receipts and approvals. If you want employees to submit expense receipts at the end of each month, or within 30 days of a purchase, let them know your expectations. Explain the protocol for unapproved expenses, such as how long the employee has to "pay back" the company or how an employee may "defend" a purchase.

Monitor employee credit card use

Review your business credit card program every year to make sure you have the appropriate credit limits and purchasing responsibilities for all cardholders. This is also a great way to look at the types of purchases your employees are making. For example, how much are they spending on office supplies? If they're spending a lot on pens or toner for printers, can you get those items in bulk? As you can see, reviewing cardholder transactions can help you better manage expenses and possibly save money in the long run.

Even though you trust the employees with cards, you should still check their transactions to be sure they're using the card responsibly and within your outlined policies. Your business is responsible for purchases, and clear policies and procedures will help employees know what purchases are authorized and what will happen if unauthorized purchases are made. Some card issuers also have card controls that allow administrators to set card limits.

Where do I start?

If you currently use a business credit card, talk to your lender about extending your credit limit to accommodate additional employee cards. Be sure to ask about any associated fees—most providers offer employee cards at no charge.

It's a big decision to allow your employees to use business credit cards—don't take it lightly. Set up and communicate the policies and procedures necessary for a successful program before giving a card to anyone, and then consistently monitor your program.

Ready to explore?

Business credit cards are subject to business type and credit approval.

The information provided is not intended to be legal, tax, or financial advice. BB&T cannot guarantee that it is accurate, up to date, or appropriate for your situation. You should consult with a qualified attorney or financial advisor to understand how the law applies to your particular circumstances or for financial information specific to your personal or business situation.

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